1990 (3) TMI 118 - AT - Income Tax

Summary

Issues:
Assessment year 1975-76, Advance tax payment, Revised return filing, Assessment time limit, Refund claim, Board's instructions under sec. 119(2), Estoppel, Validity of assessment order, Refund entitlement.

Analysis:
The appeal pertains to the assessment year 1975-76 where the assessee paid advance tax but filed a return that was not traceable. The assessee claimed a refund of the tax paid as the assessment became time-barred. The Board issued instructions under sec. 119(2) to relax the time limit for assessment. The assessing officer then made an assessment order in 1986, determining the income and refund due, which was refunded to the assessee. The assessee appealed to the AAC seeking a refund of the entire tax paid, contending the assessment was invalid due to time limitations. The AAC rejected the appeal, stating he lacked authority to order a full refund. The assessee then appealed to the ITAT, arguing the assessment was time-barred. The ITAT noted the assessee had approached the Board for relief under sec. 119(2) and accepted the Board's instructions. The ITAT held that since the assessee sought relief from the Board, it was estopped from challenging the assessment on limitation grounds. The ITAT emphasized that limitation bars the remedy but does not extinguish the right to tax on the assessed income. The ITAT dismissed the appeal, stating the assessment was valid as per the Board's instructions and the assessee's acceptance.

The ITAT distinguished the present case from the Deep Chand Jain case, where no assessment was made and no Board instructions were involved. In Deep Chand Jain, the High Court dealt with a Writ Petition, whereas the present appeal was against a valid assessment order made in accordance with the Board's instructions and the assessee's consent. The ITAT concluded that the assessee had no grounds to challenge the assessment's validity or claim a full tax refund. The ITAT emphasized that the assessee had benefited from the refund based on the Board's instructions and could not now dispute the assessment's validity. The appeal was dismissed, and the assessment order stood upheld, denying the full tax refund sought by the assessee.